Abstract:

In the field of real estate there is a need to audit Automated Valuation Models (AVMs), commensurate with the global trends for increased automation, regulation and demands for verification and transparency. Although there have been calls for more material to assist auditing the functionality of AVMs, it was observed by Realia Management Oy when drafting their first AVM auditing template in 2012 that adequate material exists, but is scattered. That observation was confirmed in the literature review for this study. Therefore, there is a need for a thorough overview of the requirements for auditing AVMs: the qualifications, the relevant materials, the regulations and the organizational characteristics needed for successfully performing an audit. Indeed, such an overview could be considered a prerequisite for further studies on AVM auditing. The research here was based on qualitative analysis using the Design Science Research (DSR) approach, with the goal of forming a framework from an auditor’s perspective.